MKTX - Earnings call transcript Q4 2020 | MarketAxess Holdings Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded on January 27, 2021. I would now like to turn the call over to Dave Cresci, Investor Relations Manager at MarketAxess. sir. ahead, go Please

Dave Cresci

welcome MarketAxess and Conference Quarter Call. to morning Fourth the XXXX Good

Rick Chief DeLise, year Chairman review the initiatives; financial Officer, McVey, For call, results. and automation and Officer, President Chief for growth will quarter will the discuss Concannon, then, the the Executive Financial and Chris full Tony XXXX; and and Operating Chief highlights will Officer, review

statements remind represent the The call financial company's nature, forward-looking over you me that those from materially turn let include their today's may is I condition future Before statements. company's regarding indicated forward-looking Rick, These the belief by and events in may call to statements. differ what actual that results uncertain. are

factors on XX-Q the quarterly company's results, I quarterly earnings XX, our our on ended that on this could third was For XXXX, read direct of release, in of description you morning quarter. also which Form year a our would now issued discussion Form affect please forward-looking XX-K disclaimer future our and some annual available is to earlier report the see December factors statement and and risks of for in risk website. the report for the the the

to turn me the let Now, call Rick. over

Rick McVey

client versus quarter in strong morning, of $XXX to surged XX% EPS a last new income. billion gains million high on-boarding Good during with fueled share year in fourth share products results. fourth significant XX% and million transaction in high-yield and the XX% and the and and of up Open quarter, was the grew XX% core Trading quarter momentum on increase quarter. to Deutsche of review was reached underway. clients. finished a us Market Reporting up year. $X.XX operating to Regulatory Hub in revenue of We to estimated XX.X%, We a business of XX.X%, is Revenue High-grade our the for driving XX.X%. Borse's from year-over-year increase for market and joining closed and the thank savings $XXX $XXX a volume cost our you XXXX quarter, full record year acquisition fourth new the in share integration

results, increase of our strong quarterly of Directors share, approved X the record per On our full from to year $X.XX back Board $X.XX. the in results. highlights an dividend up our Slide

show growth compound revenue Our execution compound and of with growth X XX% growth long-term consistent our of agenda EPS strong year and of XX%. results XX-year

year full our trading XXXX during this growth For in XX% high-grade, year products in results trading $X.X Active global all in and Munis. volume US surpassed yield, XXXX growth up firms volume was Total of with US. XX% conditions. and to credit update strength the $X.X year which from was volume, cost our and Trading liquidity order on are of both Open pool dealers savings transaction Open to Open Trading grew this to full flow XX% XXXX. billion in an outside Investors record of Slide EPS XXXX, revenue revenue about XX% half Estimated the traded skyrocketed trillion. XX%. and market year. X,XXX, client X for high from reflect Eurobonds, The had XXXX. provides Trading of was up core in our EM, credit into record

also in in quarters. more recovered peaked issuance high-grade QX. high yield High last been normal pre-pandemic spread of and declining to levels. and As fell grade spreads Credit several over have levels credit has back year-end, the QX volatility to bond

fee corporate years the at on maturity fourth combination the million factors quarter. the of to X.X the These volume is market This increase years. range contributing volatility of historical end of high remained in for and year-over-year for not result bonds one in normally activity, growth. conditions issue new more a up are per favorable of just X% lower at normal TRACE the capture was to Average traded high-grade. As volume the system in the our

in year, second grew However, XX% year, credit superior update credit growth. sustained quarter central provides Trading earnings the on trading revenue Open overall and half marketplace strongly the normalized market market. the of half increased Trading. conditions XX% saw Open role driving last share the in even demonstrating X Slide of year. Trading and our of the in second revenue grew market Open an during though credit today's fourth volume versus growth the

in Dealer trade volume, quarter, in year-over-year, the fourth show growth unique trading For Open the Trading over at Open XXXX. from Open and quarter of volume our XX% the credit completed one our global XX% during X,XXX Trading volume Trading in client strong Trading up trends initiated core quarter. represented Open least products. of of firms approximately XX% grew each

billion and opportunities trading XX,XXX day, new $XX creating delivering for our Open in portfolio value. notional are daily per We totaling clients Trading orders by over

protocol delivered we markets. During the important including also enhancements, year, live

mid-market Our traded order corporate our sessions well that Mid-X, based as composite book as utilizes our data. plus platform bonds matching actively for

the over on and services to Now, post-trade. turn Chris information me to call automation, let update provide an

Chris Concannon

the the Rick. the X $XX.X billion fourth to up trading fourth the demonstrates quarter Auto-X quarter, trade credit Slide Automated growing the you, XX% XXXX. volumes rose in $XX momentum grew XXX,XXX, in to prior Thank quarter billion in from up count automation of trading. of in from year.

to of of platform quality a Clients and trade In XX% million likelihood seeing US the the inquiry remain dealer bonds. adoption size across the ultimately fourth of our Auto-X and of size execution size execution the number Auto-X as platform. to to on use X.X algorithms continue in comfort in yield, they Auto-X orders the Eurobonds, The also solution. of grade, trades. responses XX% also Algo gain which rising. emerging investment quarter to is The XXXX. approximately healthy The with increase XXXX the XXX,XXX responses trade their high the resulting are continues We grow average grew strong, average market compared of improves XXXX, compared through with per average conducted in across

automatically traction. solution XXXX, liquidity value allows notional solution. in Responder, $XX The investors Our automatically Trading. Auto provisioned requests over billion In seen Open automated has made new to respond through was liquidity our available Responder solution, to early for through Auto

Information rate trading been XX%. diversification. with share $XX.X solutions. grows credit, overall for provides of revenue seeing the an million demand has analytics trading never data more As for are than X we the electronic Slide product of and reached compounded growth a automated in continued update demand on X-year in year today. services our Market

bond, helping to In trading thus generate XX% client years Europe has unique and assisting MiFID solutions Our substantially. transaction following in XXXX, volume. trade, are greater our pricing recently post-trade our capabilities. penetration year-over-year. data to announced providers implementation Reflecting our Post-trade Continental our million the of liquidity Hub, business we data the revenues were grown services which commitment completed in on acquisition platform, the adds Reporting post Regulatory at $XX.X and Borse's significant of up Deutsche strengthens II,

solution to business a in income post-trade capabilities Rates integration. suite seamlessly complete quarter with This the had trading allows trading current unique users milestone platform, fixed a a credit solution integrating trading trading Our fourth critical full with access this by click-to-trade Rates providing centralized of MarketAxess products. within US the treasury

ability our X volume of bond hedge provides transactions. We in net to trading their efficiently solution across our Slide supports trading categories. QX, also launched summary a clients' hedging corporate credit which product our

by high-grade were I'm category percentage high-grade US increase market XX% $XXX XX% Our in year-over-year. for volumes majority largely the Market X.X volumes market quarter. Estimated due experienced that in up increased US the and our in municipal the XX% and XX.X%, also market XX% excited report bond bonds grew XX% quarter, to to other XX% up by market up gains points estimated year-over-year for account Volumes bond increase high-yield to year-over-year share billion an volume. year-over-year. were our credit US the for of volume a high-grade billion gains, were increase, to volumes. share $XXX to volume while year-over-year emerging vast doubled share market Eurobond US year-over-year.

new share QX technology, enhanced tools compared Rates XXXX product to dealer differentiate Our Rates market in of maintained in will what dealer coverage, environment. believe and our business a was data made offering. trading its to to continue difficult investment We the expanded market

Green critical regions in very traded similar combined are successful below bonds above XXXX, was the estimated Green emerging $XX trees volumes XX% across Estimated market core quarter our trading initiative XXXX. With volumes the estimated XXX,XXX above TRACE is levels. seasonally the are than trading four on January XXXX billion to world. markets planted with more well running nearly across but three US XXXX levels, the January Eurobond while fourth products and January share Bond platform in Our market resulting January, remaining in days

January month-to-date volume credit more XX% Our than XXXX. average trading is daily products in up versus

call the to Now, turn an let financials. update Tony provide on over to me our

Tony DeLise

Slide the the higher and margin reached a income rate range. were increase volume services in down XX% million. laid in and at of quarter trading percentage fee uplift to provide XX% weighting was for in in sizes XXXX month in Thank Hub guidance XX%, commission the summary decline level, XX% XX at right earnings clients revenue, more high-grade and our commissions. volumes versus tax The points a per XX% margin per tax you, higher added our acquisition. volume US trading the was the trade our year our Regulatory fees low was operating sequential we operating effective increase and reflects to On of which duration variable million, quarter. Revenue Slide than revenue higher XX $XX from Reporting capture XX.X% larger came capture. $XXX higher fees XX.X% driven was the year-over-year of in quarter, transaction Total Combination XX% and resulted was reporting XX% but Operating by trading end The to of we effective and have accounted performance. year-over-year. fourth XXXX up capture. million up credit activity to US was $XX up and rate X credit year-over-year. up trade out fee fee the overall in On Chris. Post-trade quarterly full $X.X was year-over-year year up shorter Full million fee credit high-grade third during X XX.X%.

bonds. support rise basis, The amortization all almost in settlement in with was XX% a dealer is variances fees compensation the sequential sovereign transition of commitment provides with personnel our slight XX with of by fees variable of and The shift towards in and growth sequential consulting under due volume. distribution headcount other a a credit but Open principally and a integration platform The in minimum and the due decreased the the markets in expense to Eurobonds projects. of on increase Higher detail. change was plans. were increase transaction and was acquired Our depreciation emerging an and and costs our year-over-year intangibles. professional $X in category and fee benefits M&A associated drop including you costs greater expenses initiatives. year-over-year. up consulting to unused and higher reflects product along due Clearing was fee in The continuing $XX weighting development capture increase clearing with sequential credit amortization due in costs, XX variety mix Trading the and trading reflecting Slide to XX% other capture factors investment to

measured clearing third Trading or ticket a mentioned one-third. costs party we As of decline a the per quarter call, percentage as expect earnings basis of on trading Open by upwards revenue third steady our for on to credit I state

the On aggregated Excluding in XX Regulatory and M&A transaction and were and the the XX% with million reached $XXX investments Dividends balance acquisition, capital associated million and and million quarter. sheet intangible Slide of Cash amortization Hub record integration and XXXX. expenses in XX, of costs provide cash we were expenditures fourth up repurchases million, in free $XXX assets as December a XXXX. flow were $XX $XXX share information.

matches which earnings $X.XX increase share, per dividend quarterly generation. tripled growth to announced and the have the the in past over five dividend level the we flow years, in cash free With the

new authorized program repurchase Board million a $XXX expiring the recently at the replace end Our to the share of plan March.

the of employee has to purpose dilution offset grants. plan from As been the is our practice, principal equity repurchase

at clearing the with year-end our add credit also On laid XXXX expenditures, were no a entered syndicated facility. outstanding million to During out our There capital guidance the effective rate. into and revolving support $XXX financial quarter, fourth new we for the banks XX, and expenses, flexibility. this tax facility have Slide activities we under borrowings

the to million past expenses expected with expenses of million. total benefit years. $XXX be over XXXX of costs the range to total several the around that expect consistent We in will Employee $XXX represent trend compensation are XX% and

plan X.XX, $X the million an reflects acquired have the integration costs. of $X to guidance. effect adding Regulatory year US dollar We range amortization operating million Reporting has and non-recurring sterling around guidance of including to built rate the the using which related exchange This of intangibles a $X to full for estimated a expense million of Hub acquisition expenses in

expenditures from new million range roughly which $XX protocols costs to $XX capitalized are enhancements related to the development currency of the guidance expenses on a represent Reporting investments the year-over-year to an making two-third expected and to basis. from to Regulatory software the Hub, are trading in resulting approximate increase midpoint of million relates platform. XXXX expenses range XX% Excluding capital would constant in the we

quarter, year for by that related the We versus Based on XXXX then and in in the range rate compensation likely to effective expect expected rate the tax share-based excess range timing for effective benefits to the quarters. estimated excess be first range will the The the in and third XX% driven XX% will rate benefits, fourth is full increase from awards. XXXX XX% second, XX% tax tax in effective to the tax XX%. the realizing lower tax the

to turn Rick. call let back Now, the me

Rick McVey

positions Tony. momentum for half you, employees to ahead. us revenue an for earnings Thank for thank growth second all of was terrific Market outstanding results. well led their that share these XXXX years in year the growth. dedication the continued and want to in I XXXX MarketAxess

happy of We are portfolio our our open the line continue and be investing to to long-term order to record of your heavily protocols, clients growth. sustainable products, grow would in for track We questions. now

Operator

[Operator first with Fannon comes Instructions] Our question from Jefferies. Dan

Dan Fannon

morning. expenses, the guess Tony question on my outlook. is of the good thanks, just I first kind for and Hi,

travel to slightly Looking you higher I of initiatives that of Could some and of terms of were at of where what highlight maybe And other COVID kind to might it's also started factored you than macro spend expenses. out of the spend, you organic kind spending then in that year going terms might expense and of be and year-over-year? in yes, different last that, growth, related normalization just think in areas spending the be on. kind so and the any then -- around

Tony DeLise

take Happy that Dan. Sure, to one.

tried to pieces, Regulatory pieces, a say, guidance, easier on we're increase. two I'd explain a which surprise. and So to in guiding we currency on organic the XX% is the growth the top the expense be probably of give overlay the you shouldn't it's to constant then the that. It Reporting Hub

earnings had look revenue color at CAGRs. you If Rick given the some on and history,

past look If XX%. the over you years, at five or expense the ten it's CAGR

the continue also if and revenue to line guiding I So the in shareholders we, investment over the at But that the really aside, that we're right suggest new And organic areas, XX% newer look got that continuing will with tell years. with the would XXXX you is history. investment we expansion of you to agenda. I'd that type support put we've of geographic -- delivered piece in growth a on terms We've pieces, that efforts. product full that entered the protocols, earnings

count increase is and continuing absolute most be surprise, in line you're items, path. we're of going won't head a where expense Individual see driven. on really So benefits. and that the It's investment to this comp

think added You people or that about so we XXXX. in the XX

be that's another will to that We it a XXXX, dominate line plans the the surprise our expense agenda support have so or so increase. add to XX that growth in personnel won't item

expected organic reflects amortization at will investment the -- investment higher costs. platform, theme. the look so the software or amortization been you around along and that be of protocols revolves on be XX% in And is it and XXXX and making Trading Depreciation than basis. piece, specifically other an to development this The and we've the

resumption T&E. just you and be of an the other little our of increase in to Yes, advertising expenses, So two expect I'd the got year. resuming those give in And we by entertainment half Right sometime in travel big and would are items models you the a G&A and of give items. we've driven color. now which the marketing second bit

So numbers. the there, dominating what's some you'll not absolute see that's increase but

a bit just The to color. other one, give little of you

And to do We flattish are expecting clearing want clearing year-over-year. costs minutes I be there's spend just two two to components that because to on costs.

in savings expected costs You by agents US related trading to and the budgeting increase settlement related have anticipate costs in clearing clearing Trading And treasuries. -- that to in offset increase going increase have flat. likely aggregate then and be an UK, in self-clearing Treasury in The volume. volume Open be we're and we US an from credit, transitioning savings you to US an the and those will treasury from to

expecting we're of million, we to $X the steady clearing offset. from state though savings or even expect So be transitioning in that $X million

So just you wanted Wasn't that it? long-winded was a give answer. little bit Boy color a that. on of to

Dan Fannon

asleep. fell I

Operator

Our comes Sandler. Repetto with next from question Rich Piper

Richard Repetto

guys. Yes, covered had trading a good but well it so a question morning. Good automated had it. on I I I Chris can morning question. skip

So -- had. that right the the long-winded I'll to go answer other Tony

capital started at in I we where the place in in enter thought saw and thought -- new in Trading you trying could any we -- ramped just And why half. this self-clearing, thought said was we the But impact you I it fully percentage, revenue year a I mentioned are by, cut reduce it's the understand thought regards or that we it to right like have And at On to seem of as and running Open August. it it that now, doesn't in quarter that like all third. I you I XX% etcetera? to thought launch

Tony DeLise

transition you cost on really happy to upwards And US, component of about And the Trading agent the talking a to self-clearing clearing of third. the to follow-on And that seeing I'm part have has been look those answer at the the with costs reduction the question in and you're and not why by bond in corporate transactions. is cost that's -- UK. associated Rich And we've clearing in two pieces. Open settlement -- this. this But second the clearing why the need in to we a with do reduction. So,

trades. XX% model where of those past. depends term, talked market US have revenue. treasury component on longer protocol, is in runs broker-dealers cost we'll clearing trade trading and two I've leaving place. look to And in on In around the clearing clearing about treasury second this It depends The during that intermediates we're term the costs term. the treasuries access it near at you for at the Clearing for the quarter. treasury look the rationalizing ultimately pieces. addressing size Longer But those model somewhere

we costs. admittedly, see in Now, the some improvement did quarter and fourth in -- clearing

for -- So credit, a in was higher Trading prior than a XX% fourth were year X%. the a little example little the revenue running clearing a as Open of for had more They than quarter. percentage been costs little

for that did see are at percentage but on basis, on -- still improvement, looking traded expenses quarter. a savings. some -- per upwards per third-party as We're trading be basis, third XX% some a about So fourth look or of state at in clearing we looking a will cost still there at open of on savings teething a XXXX credit. revenue, a whether steady it a you on we we so We the ticket expenses, a believe basis acknowledge the pains that were we're million

but with the do the X it of side. and bonds, our through -- corporate in with clearing on treasury it clearly both have doesn't -- come cost, elements again then to to So numbers, has we some

Rick McVey

thought, US self-clearing complete to just you Rich, OT. products if across look our the our fully converted and it's And at that in

So we're fully up and running.

our treasury Trade solutions with comes for conversion launched, self-clearing anything Rates the as to first trading today. to through that solution recently is the platform, quarter. we And that Our targeted of our platform, integrated our in Europe end all and regard I Click mentioned our then

to of DDD optionality and new relationships be our offering, regard in We're continue looking will new our also our growth current to and rates our unique to look -- as platform So whether we at when. offering in part self clear third-party we clearing want -- XXXX and self-cleared. at with

lot clearing. XXXX happen will in of third with a -- regard party So to movement in to happen continue

Operator

Our Chris from Compass with next Allen question comes Point.

Chris Allen

hedging. I ask, Yes, now wanted to guys. trading net Rates integrated good just fully morning, the capability on and the

what kind the kind the so seen like product far, on participation is client Just uptick outlook been that just of and you've suite? how what's of

Rick McVey

question. great Great, Sure.

launched to on our XXXX dealer hedging going their Rates hedging auto really launched the Just fourth on protect a business, quarter which back Net was capability. dealers to hedging we in solution is late is out list seeing for time. pilot now some rolled in live clients have QX. and net go in on obviously long had solution that And a It we're of that a basis. interest hedging

So and should With up second the here solution, there. the the enhancements movements live couple of of over first to year. roll half the additional Rates fully with regard in quarter first the net client take to hedging out

think run on one off no clients. more more solution, off the the have is to liquid importantly, Click our platforms the to solution, very really And institutional streaming streaming which exciting unique things trading the our both fully run. Trade streams other integrated and of runs I

So offering. that's part as our new of

the launch of to first half also We this year. plan RFQ in

So trade. we'd Click a have to combined

some of particularly demand now to high, clients that and Rates we're would more liquid to around offering other able trade front quite And you the So is be curve the year right the and platforms trading. products. And across the of liquidity click or is of for solutions. the curve events liquid size that larger communicated for being to then, trade constraints last less end your on, RFQ a the be would our

but platform excitement run how also a full liquidity solutions. off of we is a our unique providing clients the credit product trade solutions, not some trading there with on on only similar from having So our the unique run to breadth to click

Operator

Suisse. question Ghosh comes Credit from Ari with next Our

Ari Ghosh

on evolution Hey, morning Chris, quick either a the markets. and Muni or the Maybe one Rick the everyone. of EM for good

both at Munis, transparency. limited especially data EM they have and of and Looking electronification, of low level

So hoping for that acquisitions size sort revenue data the I opportunity and you to could here leveraging [indiscernible] have including your initiatives of these hold. strategy if inefficiencies. talk was and to And of your potential timeline including kind about broader sense of take of Thanks. you platform recent structural a some these

Rick McVey

and Yes, But some RA I'm bond for to that will we I'm I'm sure points. out at market hasn't terms in really XXXX the during can happy made we're all value been lot electronic years that of the municipal a take start in follow-up of and a you course and savings are market progress pointed there right, ahead. glad you're Chris And the opportunities about the us have the two signs and institutional historically. excited enormous transaction cost we of add in growth efficiency

our in And instant is there through either done through we is you messaging the benefit Muni of is fragmented that platform. that conversations a think world. share market market market or bond lot phone as the from still there the available So most will know

the already tremendous So liquidity trade. pool Open adds into much same. is in at here that's connecting about of the market been market part don't really our an we're excited the connect a but add value other that the for of we area about us terms side much where you're all people and ahead. MarketAxess, electronic. Trading the can of EM and finding all think important more for amount participants when you And many value, of what's It's years, still all growth

debt is are local of not we only of XX% that's where the with marketplace all markets through EM alternative yet example credit our combination liquidity great global Open XX and a but Trading. about electronic, think all global dealer You connecting a not liquidity currency that hard one EM of and on in

we've see tremendous excited important a adoption of opportunity We're of areas Asia. there. signs about think beginning we So in we got electronic like trading the

be and opportunity that of an as of take whole EM a the right of global EM is part five $XX good banks of had just that and there is global going examples talked on the many important about $XXX investing so seeing million if billion. X% Tony we Munis in that this Market But are year the two and year revenue are to look our market, We XXXX, global future just And earlier, record it we're will now. the is pie. large really the up revenue why just access alone are full strategy. had at put looking way at we're of at FICC about context you or top that client

to the in tremendous market interest in to see growth that this about velocity, that the excited really the the opportunity we our liquidity, the and new continuing see market the So turnover and we ahead as invest in that's really continues what what of adopt We're portfolio to in is assets, forms in change fuels taking business. structural market place, taking changes are place will undoubtedly trading. ETF increase growth

Operator

next Our with Morgan Stanley. Cyprys comes question from Michael

Michael Cyprys

the Thanks question. morning. taking for good Hey,

is commentary going Hearing increasing. Just earlier the that wanted to around circle back to some there the through the trades size of automated of trading.

innovation, if might you terms is curious size block be whether block any Just it's to color on in you're side able even on in just penetration and how penetration, how now, could evolving add of where that that? thinking the protocols increase further, how the the about new automated you trading that's

Rick McVey

trading larger the ticket by solution. It for targeted small automated been has been for And Sure. largely ticket. hasn't clients again, adopted solution

those together the ability to at a larger for or day. automated price, And then requesting our the products, liquidity is client about suite products start quarters developing would is provide the However, block Auto-X. of which and particularly Responder were provide target to to putting end when suite day, think we other of block you to parties the trades, as integrate a throughout the a Auto similar who single and Auto-X to into algorithm order liquidity allow single both

part be of around client of execution we taker in solution. to in the all targets and But a for that have one million million around current is the today size. the Those are the XXXX size automation. anything in quality $X both, automated see as provider liquidity we similar trades as somewhere So experience, quite a some liquidity in initiatives $X

So growth sizes that's year-over-year why we're and seeing automation. a trade -- growth nice on XX%

Operator

with comes Our Voigt from next question KBW. Kyle

Kyle Voigt

Hi, high-yield question business. picture on morning. a good bigger the Maybe

I the electronic high-grade yield the there think rate the be the that that of versus yield market penetration talked when that we've liquidity high eventual in lower in agreement will characteristics high-grade high than market is about past, market.

all there, given at growth curious year. it Just in seen last to tremendous we've changed hear if electronic updated that your just just and high-yield thoughts trading

if about or different that's on market hedge the is your the of there wondering fund growth electronic long-term rates. changed view there adoption or penetration the eventual high-yield Just ETF something kind

Rick McVey

Great, that, of to can interest the Kyle, trading the the order terms during transaction that yield at our in the new trading MarketAxess Open it's are and the undoubtedly our very market is number of growth ever of quality we've inflection and thanks size now seeing it's high platform for This execution drawing -- high-yield results book savings a share year-over-year course right. for is point of story best But things, of XXXX. you're had I'd deliver. the into point in the that we so significant order open cost trading, good of

I'd is with way institutional And then, end in are significant of of much going that is we a taking investors in to are put they that example The the because clients, there more coming a the of income capital systematic very changes high systematic their trading where cost fixed say have to of So involved from trading and more platform. active our a transaction and are rebalancing high-yield into place continue also and see high-yield are alternative market. growth strategies, MarketAxess great the great savings the system is getting system. to makers yield because inclined This the market orders lot now creates transacting primary new activity committing the is we achieving. a market in this into hedge through virtuous funds cycle that strategies this credit on more opportunities. is platform finding which

really And where go. I factors. So will higher a electronic that all combination -- now it's do about yes, thoughts have share of we

to better other four million sizes. on in quarters the year now last our trading, of in high-yield that We're a much which was ago, the getting bulk been that's terrific the trade or that over comfortable putting the activity is significantly in a through lot under high really yield The sizes sign larger doing high interesting three in round thing trade really $X is observe is system. market more yield

go. with but there a we really are to results, we So the way is long pleased think

in of XX% XX% quarter are through and fourth traditional the the mostly means. is conducted other the We market

lot a yield of is left excited and there runway So, what about in see. we high market the we're

Operator

William comes Blair. question Chris next Shutler with from Our

Chris Shutler

morning. good Hey guys,

Just acceleration high-grade high-yield we five of and market, share know what going to based let's conditions share year another market given stage, in your any to one. saw gains question a the on on the in is expectation last kind horizon picture say vary I at in big up this follow over but in that market year the XXXX? for your given is

Rick McVey

on are seeing new relative them side their trends markets. creating market participants underlying is value It's take that and on both system think there tail transactions management briefly in between driving risk working very a shares credit in driving in lot you're in in global buy And both are earlier, but under mentioned through the the our trading a funds the managing macro bonds. I've favorable markets and trading way credit to underlying MarketAxess. activity growth just of positive global of lot trends that the lot growth side, ETF that of activity I leading new share is the this entrants sell activity bond market. a in And huge and ETF really the Portfolio into place. blocked many

like the to in electronic. the is is to me heavily feeling of the leaves it be is participants to going credit fact and it five that significant and global So no of still very healthy likely is to delivering that conducted the business, of And it in market share level majority all is years of investing a brings think travel the we about And will that and traditional cost continue grow allow are we very this the five participate a the the to direction of trading market hesitation field. does electronic market means. of percentage through transaction everybody because the next ten see on portion benefits why efficiency are growth have I years clear to business we over today playing

in terms So market we see gains. of good many share ahead years

Tony DeLise

at other see characteristics global experience with share that look that it in market expect market, add, similar growth. you to share, electronic just We electronic that market in I'll should you we growth where markets the combined and Rick, turnover continue. credit when XXXX growth in to And also witnessed

those in bond the higher and they across as as funds market electronic -- of XX% -- of using and the And you we're grows, that the happening seen systematic the turnover where forecast we've high where seeing increase. classes piece as entering turnover asset well. industry overall elements global of are our certain people market market see as market, be in likely hedge can that certainly does platform So entries fund hedge the rates corporate other will the

overall at share just what number of market. can't you So look electronic market single is a is the it

experienced You do in market. the typically rates turnover higher

Operator

with Our Sachs. comes next question Blostein Alex from Goldman

Alex Blostein

the guys, thanks. Hey question. for taking Thanks

to larger trades make of way of of maybe it Just I'm much where the Can year of last you actually down and their half into numbers trades and broken you putting protocols get some together. market. that a and call provide I smaller on the trying maybe building some part have over guys to initiatives around ultimately put that of that been how been has that know see a your coming that last, the the response. of evidence that year, into big through. course just kind sized some that's also

Rick McVey

up, only platform see as TRACE. I we obviously And -- see we thing blocks large on on activity large we our trades. I up the mean see would those then portfolios go go So, a of result

for up growth think that as of of liquidation are a where were that I And just really pieces trade that largely have dealers portfolio were initiative liquidations from are us It's QX. a liquidating. that seen positions. a that IG from are block those result aside block our dealer some trading coming throughout was just our trade or of evidence we the we're RFQ XXXX are XX% of of that and has block larger growth pieces unloading pushing area one to overall rate in other of benefiting done block exceptional then trade trades they they and they either

our really was RFQ volume QX overall doubled and throughout dealer substantially dealer high-yield So dealer in our RFQ growth alone, XXXX. offering and in in rate RFQ up

So capturing I where but we be of liquidation the that's evidence block, original seeing the an of benefits think pieces. of area the not we're may block

Chris Concannon

evident give that think years part way I I option trading I of years, and early in And in the TRACE investors over execute our own hold to to play automation how view terms terms among but that that best yet, think coming another when not the And in And of will blocks. percentage about to in still trading they investors Credit. the execute see is you're ahead. the it story they think of innings block in will optionality of blocks. is think going a It's if Global takes more institutional automation

Operator

Sandler. Rich comes Piper next Our Repetto with question from the line of

Richard Repetto

Mister Automation over have Yes, follow-up a for I there.

like talked share high think of higher was look the etc. it six at hit [indiscernible] the whether do you -- which you trading, yield think year helped blocks you initiatives market expected really you about at to are look XXXX XX that high like But Rick, we Open -- if just block when Trading you hit a So say months, really let's on, earlier, -- it it appears like to be XXXX? -- going got turnover or portfolio it'd in trades will next in what you all

Rick McVey

excited I'll of think, our I'm start little automation. the an with a area unique in also our I comes business, Well, with Rates bit most that's of and that investment offering. because It treasuries about,

around automation we're offering XXXX. So treasuries launching that can you remember the wrap in

performance XXXX at said look in opportunity We you given that ago recently, for if Munis had that we're just I continue in XXXX think I a so growth record day more January our our Munis and loved about year Munis, excited [ph]. around in rate. a in I and the

traditional Auto help have later day. order, be large execution day, block early is the to clients throughout Responder for to sophisticated quite and how create Auto-X in algorithm clients plan for are Our together take the a we're to auto automation time combine the starting of the a what of period point passive to the in days

can partial we're position the their they quality execution they rolled trades. executed the throughout where own of out So but being providing all success still larger on masses see day. XXXX. getting improve in the a can sized trades It's Features orders with

great but then, I high points, across a talking also area just automation automation high our grade products. we're across So deal seeing of mentioned And as the just Eurobonds, in yield, not and as uptake all in only activity well. of EM

I'm automation I Rich. XXXX. if So answered agenda big question, in not sure your for pretty

Richard Repetto

you. Thank did. You

Operator

from with Brian next Deutsche comes question Bedell Our Bank.

Brian Bedell

Maybe to roughly market you side that just untouchable commentary the about characterize what flip which argument, for can you good be kind penetration through the electronic the of percentage on as and I market, Thanks, the what issuance not, from penetration, some Can market market Maybe on thanks. believe that headwind guess would maybe largely folks. of of electronic those from of maybe morning of season viable a think part sort Great, is. as conduct the that. sort is trade but or follow-on share you -- banks bonds. new if [indiscernible] as of comment speak, share thought, you that so

Rick McVey

volume issuance robust how to very new is impacts happy I'm be take this And a and year. mimic at think and expect activity last year new levels what issue last you're shot and would Sure. to referring this activity that the it will year issue you're But to right, Brian. of that. that year. I record unreasonable new

of extraordinary many year. However, last the when active on normal pandemic. any was liquidity was just during to be we the so because dealer needs basis, the estimates, year for their bolster to at corporations still sheet look balance it it expected On an

the toward new views long-term more part of market as portfolio the think of transfer of massive one story. that credit are part I last. risk we trading piece ETF velocity. our this So we is and And turnover is year relative greater temper credit that. is issues markets to increase and activity tools in would then mentioned, trend market and on secondary the the new higher But to that participants story, And macro around still electronification of

newly short issued have market But So, have But long bonds, newly headwind really the in term overall and that yes, less others are turnover. a slightly live -- the Mid-X, might trading. minor we're I designed volume new really actively we on bullish term, bond still think bonds. market from around including issued we in traded we protocols markets,

push ahead So we on secondary that role a market, we we'll to in play into that think well. the market break to continue have the after bonds and as

Operator

Dan from comes Jefferies. Fannon Our next question with

Dan Fannon

Thanks.

the and kind underlying separate as kind the well and acquisition of growth follow-up recent non-transactional the we just a could info you the about XXXX. on of as if rate services and Just out revenue think as post-trade, for outlook then

Rick McVey

sure, Dan. Yes,

compounded had was five annual for you right year on that XX% full info side, range. or Chris look around some rate services point comments information year up revenue it's that around services, XX%. the At So any XX% the when growth at

of about sale, bit can million pipeline revenue the of year data data year had incent guidance We've we're I on before was X.X year got million, to said new We past we've a data the In capturing. XXXX. that that in that's decent little the we would $X.X content good and growth. of another XXXX. principal pretty we a around terms double-digit more we're the about And entering as reiterate pipeline clients for using got a use a last with deliver But to that, pretty XXXX. what trade sales also we've a of enter we platform, it think

pricing grow is digits. piece an make clients it make So information double services to to the and again, revenue we're the we info of important decisions. delivering But expect help

than gave had in impact what around side, be. post-trade side, post-trade higher Regulatory the that we million take the quarter. expecting On Reporting what it Hub, what color is third in in we're XXXX. the pieces the month on color some piece. given little would somewhere some on and we're We maybe revenue per that bit $X in a expecting, It's Take two

clients it's On also, SFTR really through the came side the it's organic year adding side, we've and midway we're expecting organically. on impact of And organic full a double-digit growth which XXXX. reporting been online

million So that Reporting -- Regulatory at overlay growth, looking organic you the we expecting Hub or so combination sense a that and for XXXX. for of those gives what $X we're in two items, think revenue double-digit a month we're

Dan Fannon

Great. Thank you.

Operator

Allen Our Compass with next Chris question Point. comes from

Chris Allen

participate? Yes, calls thanks guys. question. you impact bond how in around thoughts consolidated Europe and Any Dan has actually could recent for there the some asked my been guess, tape. one. quick There I just one

Rick McVey

happy Sure, that. take to

it's fair terms big tape. a the MiFID of this all increases post-Brexit lands. transparency. II and some on Clearly think by start I some We included marketplace, of that market fans creates structure early Europe transparency the consolidated think would and regulatory I trade transparency commentary days we lacking is in where are participation in of in new saying Europe today.

have all exactly do our this our think So transparency of not in and of we a e-trading obviously region. to clear it's are data have land. will yet we role the but Reg where business, supportive reporting improving transaction with and We play, amount substantial a we

before we'll the transaction believe in more that. we have, about it two, have vast we we anything that over of with do base But data ways think, time the I take implemented. is and will next it or to participate learn year

Chris Allen

Thanks.

Operator

question from Brian comes Deutsche Bank. with next Bedell Our

Brian Bedell

Folks, thanks for taking the follow-up.

next still quick demand growth two one there, overall, on your for the maybe revenue trading volumes your you your years. significantly any your rates. sort Green the a economics it's pretty though. X% It of like what's capture of Chris. volume I aren't of overall a as to for Just three it I share know see guess client And over maybe that on market, it's than characterization sort bonds different looks in growing of outlook of for so small,

Chris Concannon

mandates you your Obviously, to I own on their planting solution dollars our thing we Green initiative, goal closely certainly certainly they they made clients nice bond that something question, question were Great for of clients, went the it's on was the for million their of every as ESG we traded better filling is to this solution on trees that Green Green The with available on provide because out appreciate bonds platform. more the all year. were some initiative Bonds Green the we getting platform. look much a bond worked the of from about

of for there platform. but well, also and So environment for Bonds really saw traded the are a trees and as issuance even related economic bonds result incentives forecast green are XXXX as on record bond XXX,XXX ESG those a benefits the are the planting The over Green in there, XXXX. larger.

trees will planted. So Green portion run we Bond pick trading XXXX. a our on of getting for expect to trees issue excited planet. to ESG up related And bonds the that market for trader larger also be We're they number certificates the for make tree to the trading getting are one the will in -- we much solution. new continue Clients

it's that the clients that some There market dealers and all-to-all our that we their actual And think the can them trades solution save of worth our mandates and really themselves diversity also because efforts clients diversity the marketplace mentioning, that's attach many execution to I similar this allows products in that's quality quite participate get initiative quarter. they'll in. across dealer So have clients money open save take to it and our our the and participated better exciting, our ESG. of of on they solved around It's where execution. advantage cuts is we roll environmental another award it fourth for in an of as rolled out related awards and that out because our some trading

So clients their in select dealer, same a as seeing at execution. our best are the to execution diversity ability time the achieve

solutions solution are and XXXX we investors as the be across all exciting down coming dealer to I globe. Bond that and solution the into So quite related our from ESG look diversity expect mandates Green the

Brian Bedell

Thank That's great color. you.

Operator

McVey showing further to questions Rick queue this remarks. like call back I'd closing I'm no at in turn time. the for to

Rick McVey

for Thank safe and joining all healthy. of this you all and stay and you for the to XXXX us morning stay best

Operator

Ladies Thank you and gentlemen, call. concludes this for today's participating. conference

may You disconnect. now

MarketAxess (MKTX) 27 Jan 212020 Q4 Earnings call transcript